Works on the Virginia Civic Centre are set to commence next week.
Funding of close to four million euro was given under the Rural Regeneration Development Fund and the total cost of the scheme will be €5.3 million.
The civic centre will include a new library, additional theatre space at the Ramor Theatre, and a shared multipurpose civic events space, that can host both indoor and outdoor events.
Demac Construction Ltd are contracted for the works, which are expected to be completed towards the end of next year.
At a recent county council meeting, Cathaoirleach Sarah O'Reilly said the project will be a "big boost for the town and the county".